You probably know that referrals are one of your best sources for top-quality candidates. They dramatically increase the size of your talent pool without requiring much effort from your team. They also tend to outlast and outperform talent sourced from other means.
This likely isn’t news to you. So, the question facing staffing firms isn’t why grow your referral program, but how: how to expand the reach of your current database, how to get buy-in from your candidates, and how to source more from this golden talent pool without taxing your already busy recruiters.
Here’s how to set yourself up for success when you’re building out your referral program.
Set reasonable performance goals
It’s hard to start anything that lasts without having clear goals in mind. Many staffing firms tend to think the goal of any referral program is to increase referral candidates. While that’s a great goal, there are a lot of other ways that referrals can impact the overall health of your business. For example, sourcing more referrals can reduce the time to fill open positions and increase candidate retention.
To determine your performance goals, narrow in on what you want to accomplish and tie it to a relevant KPI (key performance indicator). This will help you and your team align on what success looks like.
Figure out how long it will take to see the improvements you’re looking for, and make sure your team understands what they’re aiming for. Creating achievable goals and making sure your team is working toward them will give you a better chance of referral program success.
Some metrics you might want to focus on:
- Number of referral placements
- Retention rate for referred hires
- Time to hire
- Sourcing cost per hire
- Candidate satisfaction, such as NPS
Make your candidates proud to refer their friends to you
The success of your referral program depends on a few logistics, which we dig into below. But first and foremost, it depends on how well your team is meeting your candidates’ expectations. If your candidates don’t love what you’re doing, they’re going to be much less likely to go out of their way to recommend their friends to you.
No matter how much you discuss candidate and client happiness with your team, unless you are gathering info directly from the source, you run the risk of operating on bad data. Regularly gathering feedback from everyone who interacts with your firm — from prospective clients to delighted candidates — will help you understand why, exactly, someone would refer their friends and family to you. And it will help you triage any issues, so you can address problems before asking dissatisfied contacts for referrals.
This sets you up for success in two primary ways:
- You can target your referral outreach to candidates who give you 4- and 5-star reviews. Knowing that they’re satisfied with the work you do, they’re more likely to send people your way.
- You can gather information on what your team does best and use these strengths as talking points in your referral outreach. This will up your chances of getting best-fit candidates through your referral program.
Consider a “win-win” reward structure
While plenty of your candidates will participate in your referral program to help out their friends and their recruiters, incentivizing your referral program is a no-brainer. Your competitors in the staffing industry offer bonuses as low as $50 per referral and as high as $500.
But, one-sided referral programs (when just the referring candidate earns a bonus) can leave candidates feeling like they’re taking advantage of their friends who need work.
A dual-sided referral program (when both the candidate and their friend earn an equal bonus) is win-win. Your referring candidate can enjoy the extra cash while knowing they helped out people they care about, and their friend, your newest candidate, gets a new job and a little icing on their paycheck.
What’s more, a dual-sided reward structure also strengthens your candidates’ relationship with your firm.
Make sure your program brings in diverse candidates
Many staffing firms want to hire a diverse workforce — and with good reason. More diverse organizations tend to outperform their less diverse peers, and 67% of active and passive job seekers said that a diverse workforce is an important factor when evaluating companies and job offers.
Referral programs may bring in more high-quality candidates, improve time to hire, and reduce cost per hire. But if they aren’t run strategically, they can hurt your efforts to create the kind of diverse workforce your candidates (and clients) want. For example, studies show that white men and women disproportionately benefit from referral programs.
There are a few ways to combat this so that your referral program brings in diverse candidates. One is to raise awareness of this issue with your recruiters and simply encourage them to ask for diverse referrals. Pinterest saw great success with this strategy, gaining a whopping 55x increase in referrals of underrepresented ethnic groups just by asking their employees to refer more broadly.
Another method is to empower your recruiters and candidates to source referrals from their wider networks. Traditional referrals rely on a sort of mental Rolodex — recruiters and candidates think of people who are top of mind for them when it comes to referrals. This is a system that makes it easy for unconscious bias to sneak in.
By giving your network the tools to generate referrals from their social media connections and other more casual connections, you sidestep this implicit bias and open the doors to all qualified candidates.
Automate your referral program
Speaking of the right tools, one of the clearest paths to success for your referral program is to choose an automated referral management platform. Automated referral programs:
- Save your recruiters’ time by automating the entire referral process
- Ensure every candidate gets an invite by automated email and text outreach
- Increase the reach of your program with dedicated referral links that candidates can share on social, in their emails, and in their signatures
- Boost transparency by providing candidates with a dashboard to check the status of their referrals
- Rely on a single source of truth by logging referred applicants directly in your ATS
- Track critical metrics, such as participation, number of candidates hired, and rewards due
Staffing Referrals is a tool that can help you automate your referral process. Schedule a demo to learn more about how Staffing Referrals can help you build a referral program that works for your company.